The greater Horn of Africa – defined in this report as Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda – represents nearly a quarter of sub-Saharan Africa’s GDP, and is home to some of the fastest growing economies, but also many areas that face ongoing conflict and instability.

Energy consumption has grown at 3% per year over the last decade, but the region remains energy-deprived. Half the region’s population lacks access to electricity and only one in six people have access to modern cooking fuels. However, averages mask large disparities in the region – Kenya has one of the highest access rates in sub-Saharan Africa, while other countries lack centralised grid infrastructure altogether. Total energy demand in the region was 120 Mtoe in 2020 – less than the combined energy consumption of Belgium and the Netherlands but with ten times the number of people. Bioenergy – often in the form of gathered firewood and agricultural waste – meets around 80% of demand. 

Most modern energy demand is met through oil products, largely for transport, and electricity, largely in households and industry. The region’s power sector has doubled its output over the past decade, and is one of the world’s most renewable systems today, with over 85% of generation coming from renewables. Large hydropower projects in Ethiopia, Sudan, and Kenya dominate the power mix today; the region has massive, under-utilised potential for solar, wind, and geothermal as well. Many of the region’s smaller countries, historically dependent on imports, are installing their first large-scale solar PV projects, such as the Juba PV farm in South Sudan.

Energy infrastructure has struggled to keep pace with the region’s growth – grids remain unreliable, many countries remain dependent on costly fuel imports, and utilities are in financial duress. Adequate energy planning has been undermined by a lack of data – a challenge addressed in part by IEA training programmes in the region, and this report’s unprecedented detail and analysis on the region’s energy system. 

The greater Horn of Africa is set to continue its growth. By 2030, the population is expected to increase by 25%. Economic growth follows alongside, but is beset by many challenges ranging from pervasive poverty, conflict, instability, a changing climate, and not least, record-high prices for energy and food driven by Russia’s invasion of Ukraine. The region is also in the midst of its worst drought in 40 years – a phenomenon set to worsen with climate change.

A lack of energy infrastructure remains a formidable hurdle to development. Overcoming these barriers holds out the promise of stronger economic growth. Such a pathway is explored in the Africa Case, where the greater Horn reaches universal access in 2030 and securely and sustainably energises an economy twice the size as it was in 2020. However, realising this scenario requires increased efforts, as Africa is not set to realise these ambitions under today’s policies, reflected in the Stated Policies Scenario (STEPS).

In the STEPS, modern energy grows from around 25 Mtoe to over 70 Mtoe by 2030 – nearly 3-times larger than the greater Horn’s energy use today. To realise the Africa Case’s vision of universal access and economic prosperity, modern energy demand grows to over 150 Mtoe. Oil demand nearly doubles over 2020 levels in both scenarios, but the Africa Case sees a much faster uptake of renewable electric generation – more than six-fold – and a huge reduction in the use of gathered bioenergy in cooking, displaced by modern fuels as part of the drive for universal access.

Today, 140 million people in the greater Horn lack access to electricity – more than the population of Mexico. Strong improvements have been made since 2010, with 8 million people gaining access annually in average. Kenya and Ethiopia lead the way, and connected close to 35 million people each since 2000 – roughly 80% of those gaining access in the region in that same timespan.

However, this progress has stagnated with utilities facing climbing debt burdens, as they took on losses to keep bills affordable through the Covid‑19 pandemic and now are confronted by high energy prices caused by Russia’s invasion of Ukraine. Consumers as well are facing decreasing purchasing power, slowing the adoption of off-grid solutions. We estimate that around 5 million more people live without access as of 2021 than did before the pandemic.

However, there is cause for hope. The greater Horn is a world-leader in off-grid access companies. Ethiopia and Kenya together accounted for 30% of global solar home systems and solar appliance sales in 2021. These countries, along with Uganda, are front-runners in Africa for mini-grid expansion. Somalia, a country without a national grid, has developed an active off-grid market, and Eritrea has reached nearly universal access in cities.

Today, more than 250 million people in the region rely on traditional cooking fuels, with few countries having national clean cooking rates exceeding 10%. In rural areas, the problem is even more acute. Recent price spikes in liquefied petroleum gas (LPG) are pushing many households to return to cooking with polluting fuels like charcoal or other gathered traditional biomass. This burden falls on the women in the household, thereby limiting their ability to pursue schooling, other work, and community participation.

However, the region is home to some of the few success stories in Africa for clean cooking. Access rates in Sudan and Kenya increased by 20 and 10 percentage points, respectively, between 2010 and 2020. They are also among the few countries in Africa with a target to reach universal access to clean cooking services by 2030. Sudan has the highest access rate of over 50%, followed by Kenya, Djibouti and Eritrea.

Under today’s policies in STEPS, 110 million people still live without electricity in 2030. Only Kenya provides electricity to its entire population, while Ethiopia nears 90% of electricity access. Access to clean cooking in 2030 remains elusive in most countries, with 240 million still lack clean cooking solutions. However, there is some progress, with two-thirds of the population of Sudan using clean fuels by 2030, one-half in Kenya and one-third in Ethiopia.

The Africa Case shows a brighter future, achieving universal access in electricity and clean cooking by 2030. This requires expanding on- and off-grid connections to over 20 million people and providing clean cooking fuels and devices to more than 30 million people every year. Near-term actions can immediately spur increased progress: removing import duties and other taxes on access equipment, expanding affordability support to off-grid systems, and putting the legal frameworks in place to tap into international climate finance streams. However, long-term planning backed by concerted government and international support will be needed to reach these levels of progress.

Electricity becomes one of the fastest growing parts of the Horn’s energy system to 2030. Installed capacity triples in STEPS in 2030, and grows five-fold in the Africa Case. The share of electricity in total final consumption rises to 15% by 2030 in the Africa Case, up from 4% in 2020.

Renewable power sources out-compete most other sources. In the Africa Case, solar PV capacity increases 25-fold, geothermal power tenfold, and wind and hydropower fivefold over the 2020-2030 period. Hydropower remains the most important source, accounting for two-thirds of power generated, while geothermal accounts for about one-fifth.

Policies to attract and enable investment are required to cater for this massive uptake of renewable energy. Project developers often face barriers in financing the early stages of projects, going through lengthy approval processes. Greater attention on strengthening existing grid infrastructure, interconnecting regional grids, and expediting renewable generation projects also helps to reduce the risks of new project development.  

Energy efficiency can be a key lever to reduce strains on a growing energy system, relieving pressures on consumer bills, managing fuel import burdens, limiting the scale of expensive new infrastructure, and lessening the risk of dumping inefficient appliances and vehicles. The Africa Case envisions far greater focus on efficiency between now and 2030, with 30% less demand than in STEPS. To achieve this goal, the region’s energy intensity needs to improve annually by about 4%. This pace is challenging but achievable and comparable to that of the People’s Republic of China over the period 1990-2000.

The greatest gains are in the buildings sector. Improving the efficiency of cooking, cooling, and appliances saves the most energy to 2030. Key initiatives are contributing to these efforts today, such as the Uganda Building Act, the Energy Efficiency Lighting and Appliance project in East Africa, or plans to harmonise Minimum Energy Performance Standards within Eastern and Southern Africa.

Transport efficiency offers the next largest opportunity. Energy demand for mobility doubles in the Africa Case and the number of cars more than triples. Stricter standards on vehicles and adoption of electric two- and three-wheelers save nearly 4 Mtoe by 2030 compared with in STEPS, also reducing the region’s oil import burden. In the Africa Case, increasing transportation use are largely met by oil, but restrictions on the sale of inefficient vehicles, new and used, help to improve efficiency. Electric vehicles meet only a small share of growth due to high costs and limited grid reliability. However, electric two- and three-wheelers take off and increase electricity demand by 10 TWh in 2030 in the Africa Case.

Despite being one of the regions globally that is most vulnerable to the impacts of climate change, the greater Horn has one of the lowest levels of emissions per capita. In 2020, the greater Horn contributed 57 Mt CO₂ to global emissions – roughly that of New York City. The Africa Case envisions an economy twice as big as today but with lower emissions than in the STEPS, thanks to greater focus on efficiency and power sector renewables. Emissions grow to 100 Mt CO₂ in the Africa Case, mostly from oil in road transport, then industry. All countries in the region have submitted nationally determined contributions under the Paris Climate Agreement, committing to take measures for mitigation, but include conditional requests for international support for those measures alongside climate adaptation.

In sub-Saharan Africa, total energy investment has been declining since 2014. To achieve universal energy access, support economic development and adhere to countries’ climate targets, total energy investment more than doubles by 2030 in Africa, with clean energy accounting for roughly 70% of spending. Achieving full access to modern energy across the continent by 2030 would require investment of USD 25 billion per year - comparable to the cost of just one large LNG terminal investment. Current investments fall far short of these levels. In 2019, they amounted to just 13% of the average needs for 2022-2030 in the case of electricity and 6% for clean cooking.

Achieving the Africa Case in the greater Horn relies on improving the investment environment and creating a pipeline of bankable projects. Cumbersome and inefficient bureaucracy, a lack of clear energy sector planning, and limited technical expertise all contribute to significant cross-cutting risks for investors, although the severity of these risks varies drastically across region. Attracting more energy investment requires better leveraging of limited sources of concessional public financing to attract more private capital. New sources of finance specific to clean energy can help: climate finance, carbon credits, renewable energy certificates, and sustainable or diaspora bonds. These sources can also help cultivate stronger local capital markets, and play a growing role in financing the region’s energy sector.

The greater Horn has immense potential for clean and sustainable energy development. Strong efforts on the ground, coupled with international financial support, can bring the region on track to reach full energy access, provide economic and employment opportunities (including for women and youth) and align with climate targets. Actions need to reflect the different starting points of the diverse countries in the region.

Regional integration under the auspices of the Intergovernmental Authority on Development, through power pools and East-African organisations, and in the context of the African Continental Free Trade Area can accelerate economic and industrial development and lead to a more inclusive and sustainable energy future. The dynamism of the region’s energy sector, the increasing availability of competitive clean energy technologies, and lessons learned across the continent and locally offer opportunities to support economic growth and accelerate progress towards the targets of United Nations Sustainable Development Goal 7.